Millennial Media's Market Cap Exceeds Mobile-Ad Market

Ad Network's Shares Nearly Double in First Day of Trading on NYSE

On Millennial Media's first day of trading, its market cap far exceeded the amount advertisers will spend on the entire U.S. mobile banner-ad market this year -- a reflection of the growth potential of advertising on smartphones and other mobile devices.

Shares for the Baltimore-based mobile-ad network were priced at $13 yesterday and almost doubled, to $25, by market close. That makes the company (still operating at a loss) worth nearly $2 billion, which is more than twice the $861.7 million that advertisers are expected to spend on mobile-display ads in the U.S. in 2012, according to eMarketer.

While ads have become ubiquitous on the mobile web and on smartphone apps, they're still a small-line item for the nation's advertisers. Mobile-search advertising is a bigger business and expected to reach $1.3 billion in 2012 -- nearly all of it going to Google.

Millennial is the first ad network to go public in some time and may be the first to be dedicated solely to ads for mobile devices.

Millennial Media, which sells advertising for smartphone apps and mobile websites, held 17.7% of the mobile-display market in the U.S. last year. That's third, behind Google's 24.8% and Apple's 18% in 2011.

By going public, Millennial has pulled away from the pack of small mobile-ad networks in an increasingly crowded, fragmented field.

"Millennial has moved into a middle tier between some of the others; separated itself from the smaller ad networks," said Noah Elkin, principal analyst for eMarketer. "But it's still much smaller than Google or Apple's." Millennial, which premiered on the New York Stock Exchange today with the symbol "MM," reported $103.7 million in revenue for 2011 on a net loss of almost $287,000, according to filings.

While Millennial sells advertising globally, it's only begun to expand operations internationally. The company opened an office in the U.K. in 2010 and one in Singapore last year.

Gartner Research expects the global mobile-ad market to hit $20.6 billion by 2015, from $3.3 billion this year. "We are thrilled today to became the first pure-play mobile-advertising platform to sell shares on the public market," said Millennial President-CEO Paul Palmieri in a statement.